Thirty Somethings Flip-Flopped on Homeownership

An analysis by Chris Porter, a senior manager at the John Burns Real Estate Consulting practice, has some frightening findings for the housing industry. Americans aged 30 to 34 years old in 2012 had the lowest homeownership rate of any similarly aged group before them… yet just five years earlier, in 2007, the same people had the highest homeownership rate at 25-29 years old than any group before them.

Porter calls it an amazing reversal of fortune and possibly the most amazing, underreported demographic fact today.

Using homeownership-by-age data from the Census Bureau, Porter compared households by years of birth to examine how homeownership changes over consumers’ lifetimes.

• Lowest ever in 2012: 30-34 year-olds in 2012 (born between 1978 and 1982) had a 47.9% homeownership rate. This is a full 6.5 percentage points lower than those five years older had achieved at the same age and lower than any group before them! (This is based on data available beginning with those born in 1948.) Porter calls them the “Subprime Generation.”

• Highest ever 5 years prior: Those same 30-34 year-olds had a 40.5% homeownership rate 5 years prior when they were 25-29 years old in 2007. This is 6.2 percentage points higher than 25-29 year-olds in 2012 and higher than any 5-year cohort before them.

‘Our consulting team has been pointing out a real dearth of entry-level buyers over the last several years, which is counterintuitive when you consider that this has been the most affordable time in generations to buy a home. What we learned is that a huge percentage of households bought a home earlier than usual, and that same group has gone through more foreclosures than any generation before them,” Porter wrote in his blog.

What does this mean? It is more difficult than usual to sell entry-level homes today, but the pent-up demand for entry-level housing is huge, he said.

The Ultimate Guide to Fighting Low Appraisals

Nearly half the home buyers in America experience something like this:
You’ve saved for a down payment and worked hard to get approved for a mortgage. After months of looking, you found a great house that meets your needs and fits your budget. Your offer has been accepted. You spent money on inspections, a title search, a survey and other closing costs. As the closing date nears, you gave notice where you live and put down a deposit on a moving company.

Then you receive a letter from your lender. Your dream home has appraised five percent lower than you anticipated based upon the price you had agreed upon with the seller. The lender is unwilling to increase the amount of your loan.

The clock is ticking toward closing. If you don’t come up the difference in time, the house is gone. You’re out of pocket for your costs to date and you have to start your search over. It may take months or longer to find a deal

Sound familiar?
Whether you’re a buyer or seller, now you can fight back when a low appraisal threatens to cost you serious money, or to lose the house of your dreams.